By Jessica Wee
The pandemic has taken away so much from us – wrecking our mental, physical & financial lives, many amongst us are just living to fight another day. If you’re salaried worker, that itself is a blessing even if you’re on a salary cut.
If you have a declared salary of more than RM3,000 and need extra cash flow without collateral/ guarantor to ride through these tough days, read on. If not, still read on and share this with your friends and family!
Where should I borrow money from during the pandemic?
First of all, you should see what financial support the Government can give you. A list of guidance for individuals and business owners can be found HERE (for personal financial aid) and HERE (for business financial aid) and you should see what help is available before borrowing elsewhere.
If you have exhausted all avenues for Government support – whether living on benefits, self-employed or an employee – there are borrowing options available to you. We will run through a few options, but we must remind you that failure to keep on top of your repayments could affect your debt level, credit score and possibly your personal relationships.
Be wary of loan sharks
At this difficult time, many loan sharks are preying on the vulnerable. They will target those who struggle to get credit through a regulated bank, because of a bad credit rating for example.
Loan sharks are often illegal lenders and should not be dealt with under any circumstances. They are likely to use underhand tactics to get you to agree to taking out a loan, and intimidating measures to collecting debts.
Let us consider a few types of legal loans. With the minimum salary of RM3000, you can get a personal loan quotation & apply via Imoney, Ringgitplus, CompareHero or Directlending.com for a loan of up to RM250,000 at interest of 2.31% -18% per annum. Remember to only borrow what is really required.
Here are some frequently asked questions about taking out personal loans
🧝♀️What affects how much loan interest we pay?
The lender will consider the loan amount requested, your credit scores/rating, your existing liabilities and your current income. You can check your credit score at ctoscredit.com.my
🧝♀️Should I rely on my Credit Cards since they are in my wallet?
You can – if the required payback amount is small and you can repay fully every month. Otherwise you’ll be paying around 18% interest per annum, and even more if your credit score is lower! Because of that, personal loans are a better choice as they offer higher amounts and are a fixed term-structured product.
You can also refinance your credit card debt using a personal loan, if it makes sense. If you have already have credit card debt carried forward every month, please consider transfer balance transfer to another bank for a lower or free interest rate period.
See balance transfer deals: https://ringgitplus.com/en/balance-transfer/
🧛How about payday loan/ micro financing?
This is a type of short-term loan where a lender will extend high-interest credit based on your income as the monthly repayment will be directly debited to your lender (paid by the lender). Its principal(base) is typically a portion of your next paycheck. Payday loans charge high interest rates (~18% p.a) for short-term immediate credit. This makes sense for those without a credit card.
See MAA Credit Berhad: https://www.maacredit.com.my
We understand this is a worrying time for everyone, and that income could fluctuate daily as the situation unfolds. Please think very carefully before entering into a borrowing agreement and seek Government support before doing so.